Correlation Between Tech Mahindra and Mask Investments

Can any of the company-specific risk be diversified away by investing in both Tech Mahindra and Mask Investments at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tech Mahindra and Mask Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tech Mahindra Limited and Mask Investments Limited, you can compare the effects of market volatilities on Tech Mahindra and Mask Investments and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tech Mahindra with a short position of Mask Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tech Mahindra and Mask Investments.

Diversification Opportunities for Tech Mahindra and Mask Investments

0.43

Correlation Coefficient

Tech Mahindra  Mask Investments

Very weak diversification

The 3 months correlation between Tech and Mask is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Tech Mahindra Limited and Mask Investments Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mask Investments and Tech Mahindra is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tech Mahindra Limited are associated (or correlated) with Mask Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mask Investments has no effect on the direction of Tech Mahindra i.e., Tech Mahindra and Mask Investments go up and down completely randomly.

Pair Corralation between Tech Mahindra and Mask Investments

Assuming the 90 days trading horizon Tech Mahindra Limited is expected to generate 0.35 times more return on investment than Mask Investments. However, Tech Mahindra Limited is 2.83 times less risky than Mask Investments. It trades about -0.09 of its potential returns per unit of risk. Mask Investments Limited is currently generating about -0.04 per unit of risk. If you would invest  157,900  in Tech Mahindra Limited on July 15, 2025 and sell it today you would lose (12,810) from holding Tech Mahindra Limited or give up 8.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tech Mahindra Limited  vs.  Mask Investments Limited

Tech Mahindra Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days Tech Mahindra Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Mask Investments

Risk-Adjusted Performance

Weakest

Over the last 90 days Mask Investments Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Tech Mahindra and Mask Investments

The main advantage of trading using opposite Tech Mahindra and Mask Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tech Mahindra position performs unexpectedly, Mask Investments can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mask Investments will offset losses from the drop in Mask Investments' long position.

The idea behind Tech Mahindra Limited and Mask Investments Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.